It's hard to be an artist. The romantic ideal of the starving bohemian selflessly driven to create long ago lost its appeal. Yet that is still the reality for many dedicated individuals, who are willing to endure numerous adversities in order to continue making their work—day jobs that fund art production even as they take away studio time; rough, often illegal, live/ work spaces on the fringes, where roommates help pay the rent well past the age at which roomies are desirable.

For the tenacious, lucky or well-connected—all talented, of course—there can be some financial relief in the form of artist grants. Myriad foundations give out cash awards or provide project support; some exist solely for that purpose. Stipulations vary: artists under 40, over 40, under-recognized or established, those working in specific mediums, exploring particular themes or new directions, or simply in need. Some grants can be openly applied for, others require nominations, and a few, like Anonymous Was a Woman, arrive out of the blue.

With the economy still hobbling along, nonprofits still trying to recoup endowment losses, and, under the new Republican-led House of Representatives, the National Endowment for the Arts in the crosshairs again, the arts are often seen as frivolous luxuries and their needs negligible.

The National Endowment for the Arts was founded in 1965, and in 1972, under Nancy Hanks, the agency’s second head, direct grants were initiated to fulfill the mandate to support art and artists in America. When the agency, under political pressure, did away with individual grants for visual artists in 1994 (it still awards fellowships to poets and writers), it not only yanked significant financial support but also the recognition that went along with a national award. While the NEA still provides funds to regional organizations that can funnel money to individual artist projects, such support is indirect and less illustrious. A few organizations have continued to present individuals with substantial sums, most notably the MacArthur Foundation, which also gives grants in science and other fields. In an e-mailed statement, MacArthur spokesperson Elspeth Revere told A.i.A., “Like humanitarian and scientific efforts, the Founda- tion views artistic and cultural endeavors as important and valuable assets in the advance and sustenance of functioning healthy democratic communities.” Which raises the question: why doesn’t the U.S. government also recognize the educational and economic contribution that individual artists make?

Over the past decade, two foundations in particular, Creative Capital and United States Artists, have responded to artists’ needs and developed new models of direct artist support.

Creative Capital (CC) was launched in 1999 with support from the Warhol Foundation for the Visual Arts, initially with the aim of replacing the NEA fellowship program. Taking their cues from venture capital, a group of 22 funders explored the idea of “venture philanthropy,” betting that projects would earn a return on investment. (The organization was the subject of a Harvard Business School case study published last year.) Four practices were identified that could be tailored to artist funding: 1) support the project through money, mentorship and meetings; 2) support the person beyond the project by helping artists build career skills; 3) build the community of funded artists by nurturing relationships among grantees and other arts professionals; 4) engage the public through promotion of the artists and their projects.

You don’t just hand them a check and say good luck,” says founding director and president Ruby Lerner, “we encourage strategic thinking.” Artists receive $10,000 up front and can incrementally receive up to $50,000 as goals are met. More than 40 grantee projects have premiered at the Sundance Film Festival, eight at the Walker Art Center and nine at MoMA, and others have been presented at Tate Modern, the Venice Biennale and elsewhere. Though only a handful of projects have seen a return, Lerner says that artists pay back in numerous other ways, such as participating in some of the one-day or weekend professional development workshops CC holds around the country.

CC grant recipient Kalup Linzy, who has also received Guggenheim, Jerome, Tiffany and Harpo grants, acknowledges the intensive process artists go through to receive CC funding but says it’s worth the hassle. How much CC is involved, he notes, is up to the recipient. Linzy’s video Keys to Our Heart (2008) premiered at the Prospect.1 biennial in New Orleans and is still promoted and screened by Creative Capital. Another recipient, Cory Arcangel, touts CC’s attention to the business of being a self-employed artist: “I had no idea what a retirement account was, or how to set it up. But now I have one.”

After the demise of NEA artist grants, several leaders in the arts approached the Ford and Rockefeller foundations to figure out new ways to support artists. Prompted by a 2000-03 study by the Urban Institute into arts funding that found, among other things, five key recurring needs of artists—living and work spaces, health insurance, funding and validation—the Ford, Rockefeller, Prudential and Rasmuson foundations put up $22 million to establish United States Artists in 2006. USA gives 50 no-strings-attached $50,000 grants per year through a relatively simple process. From a database of 7,000 and growing, USA chooses 150 arts professionals to anonymously nominate up to three artists, who are then invited to apply for funding.Executive director Katharine DeShaw is seeking to secure permanent sources of funding, which would require $50 million to endow the annual fellowships. So far $14 million has been raised, with nine fellowships permanently endowed.

One criticism of no-strings grants is that recipients may use the money to, say, buy a house or pay their bills. But those are exactly the kinds of needs USA is willing to address, anything that gives artists the time, freedom and space to make work. DeShaw said that four years’ worth of data shows that 91 percent of recipients put the money right back into their work, though she’s heard of two artists who lived for three years on their $50,000 USA grants.

On Dec. 7 the organization launched USA Projects, which functions as a sort of microphilanthropy and social networking website, and is intended, says DeShaw, “to democratize USA’s mission.” To be eligible, artists need to have already won a national grant or award from USA or from an expanding roster of partner foundations. Through the site artists are able to solicit support for a project from the general public. Factoring the trial phase that began last May, the site has garnered $360,000 in direct pledges and $283,500 in matching funds for a total of $640,000. In early January there were 92 artists active on the site (with 60 more in the pipeline) raising an average of $10,000 per project.

So is this the future of arts funding? Even the Louvre recently raised $1.3 million to buy a Lucas Cranach through an appeal on a special website (see Shortlist). “We long ago switched to a private-sector model for arts funding,” asserts Creative Capital’s Lerner. Yet she, DeShaw and most arts observers emphasize that nothing can replace the NEA and the billions of dollars it has distributed since 1965. As for corporate support, Lerner maintains that because Creative Capital funds experimental artists, most corporations, becausethey have to answer to shareholders, are not going to participate, unless they see themselves as cutting-edge companies. Linzy feels that artists shouldn’t shy away from seeking corporate sponsorship.

Puma, for example, provided funding to the “30 Americans” exhibition at the Rubell Family Collection in Miami, which included Linzy’s work. “Even if the funding promotes a product,” he says, “it still supports the artist. Most artists become a brand anyway.” Some artists, surprisingly, are wary of grants. Odili Donald Odita cautions that “project-specific grants are great when the organization is open to the project the artist wants to make, but not when the project has to fit a prescribed agenda.” While the gift of free cash seems like a no-brainer, one artist professed, off the record, “I don’t believe in grants; call me a capitalist” implying that the market will support deserving artists.

Lerner quipped that traditional philanthropy has become “ego-lanthropy,” with benefactors wanting to set up their own foundations. “I’d like to see more Warren Buffetts, who gives money to Bill Gates, whose foundation has already figured it out,” she said. “It’s hard to give money away well.” DeShaw echoed that observation: “There have been benefactors who say ‘I want to set up a foundation and fund artists,’ but then they hear what we do and they end up supporting us. We can provide access to the top people in the field.”

Champions of the arts often like to point to the economic boost the arts and its supporting industries provide to a community and, more abstractly, the correlation of cuts in arts education—which enhances spatial thinking, problem solving and critical thinking—with the decline in national math and science scores over the past 20 years. DeShaw cited a stubborn statistic provided by the Giving Institute: of the $300 billion in philanthropic dollars given out annually in the U.S., for the past 15 years the arts have consistently been stuck at 4 percent, or $14 billion. What, she wonders, would even 5 percent look like?